Litigation: Clearing the commonality hurdle

Scores of wage-and-hour class and collective actions have been filed over the past few years seeking unpaid wages allegedly due under state labor laws and the federal Fair Labor Standards Act (FLSA). These suits have been initiated by various types of employees including pharmaceutical sales representatives, telecommunications managerial employees, retail non-managerial employees, hospital employees, inside sales consultants, manufacturing employees and real estate agents. Nearly 1.5 million employees had their hopes for a class action employment discrimination lawsuit dampened by the U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). Could Dukes dampen the hopes of employees seeking to bring these wage-and-hour disputes as well?

Many of the claims in these pending actions have been brought under the FLSA alone or in conjunction with state claims. Claims under the FLSA may be brought as a collective action, which is distinct from a class action under Federal Rule of Civil Procedure 23. Some lower courts have indicated that this distinction may limit the applicability of Dukes to FLSA collective actions. See e.g., Troy v. Kehe Food Distributors, Inc.,--- F.R.D. ---, 2011 WL 4480172 at *8 (W.D. Wash. Sept. 26, 2011) (not convinced that Dukes precludes certification of collective action as “courts have made clear that the FLSA's “similarly situated” requirement is less demanding than the Rule 23 commonality requirement that was at issue in Dukes.”).

In Wong, the proposed class was “All Retail Sales Managers in California who work[ed] for AT&T Mobility Services, LLC at any time from October 19, 2006 until the present” who were seeking, among other things, overtime wages and meal and rest break wages. Wong, No. 2:10-cv-08869 at 1. The Wong court found the same defect that existed in Dukes, stating:

Whereas the “crucial question” in [Dukes] was “Why was I disfavored?,” here the crucial questions are “Am I (or was I) exempt or non-exempt?” and (under the majority view) “Were meals and rest breaks made available to me?”

Id. at 6. Although there were common policies, procedures, and requirements in place, the court reasoned that certification of the proposed class was not appropriate because determining whether the putative class members performed their jobs in line with the policies and requirements, and whether or not they were in fact denied meals and breaks would require a mini-trial for each class member. Id. at 7.

By contrast, the proposed classes in Nguyen were apparently tailored enough to meet the commonality requirement under Dukes. In Nguyen,the court certified four proposed subclasses made up of non-exempt manufacturing employees who worked at one facility of the defendant company. 275 F.R.D. at 599-600 (C.D.Cal. 2011). The plaintiffs established that employees went to lunch at the same time, and the defendant used software that automatically deducted meal time from all of the employees, the same written policy was provided to all employees.

Because of this, the company never paid out extra wages for late or missed meals, and the company issued the same deficient paystubs to all employees at the facility. Id. at 600-01.The court reasoned that “[u]nlike [Dukes]there appears no basis for finding that any of these actions were taken on an individual case-by-case basis, nor is the putative class so large and disparate that it was subject to a wide variety of supervisory practices which would require separate analysis.” Id.

These cases show us that the heightened commonality standard established by Dukes may preclude large wage-and-hour class actions with broadly defined classes of thousands of employees, even where common policies or procedures were in place. However, narrowly tailored wage-and-hour federal class actions may clear the hurdle erected by Dukes. FLSA collective actions, however, may not even be subjected to the same scrutiny required by Dukes.